A medical coder reviews medical records and applies diagnosis and procedure codes for reimbursement from insurance companies and CMS (Centers for Medicare and Medicaid Services).

There are three types of codes. First there are CPT (Current Procedural Terminology) codes that describe the procedures performed.

Next there are ICD (International Classification of Diseases) codes that describe the diagnosis.

Finally there are HCPCS (Healthcare Common Procedure Coding System) codes that are procedure codes used by CMS. This might sound confusing, but HCPCS codes are CPT codes. CPT codes are published by the AMA (American Medical Association) and HCPCS codes are published by CMS.

HCPCS originally had three levels. Level I codes are CPT codes straight from the CPT book from the AMA. Level II codes are alphanumeric medical procedure codes, primarily for non physician services such as ambulance services and prosthetic devices. They represent items, supplies, and non physician services not covered by CPT level I codes. Level III were local codes and were discontinued on 12.31.03 in an effort to standardized all claims.